Amazon Shares Close at All-Time High

Amazon's ability to get online shoppers what they want when they want it is getting renewed attention from Wall Street. Image: roboppy via photopincc

Amazon (AMZN) shares climbed nearly 4 percent today to close at an all-time high after a record holiday season for online shopping and praise from Wall Street for the company’s global reach.

The company’s stock ended the trading day at $268.46, the highest closing price (on a split-adjusted basis) since Amazon debuted on the NASDAQ in May 1997 at an initial asking price of $16.00. The stock split three times during the first dot-com bubble before languishing for years in the low-to-mid–double digits for years following the bust.

But the stock has been on a tear since the 2008 crash as the company cemented its dominance in e-commerce. Over the past 12 months Amazon shares rose almost 50 percent and the upward trend seems to be continuing. Online holiday spending this past year hit $42.3 billion, a 14 percent increase from 2011, according to comScore. Amazon hasn’t revealed its own holiday sales figures but called the season its “biggest ever.” On its peak day, Amazon sold 26.5 million items, or 306 items per second, the company said.

Despite these numbers, credit for Monday’s spike is going mainly to an upgrade from an internet stock analyst who raised his target for Amazon shares to $325. Morgan Stanley’s Scott Devitt said in a note to investors that Amazon is so far ahead in global order-fulfillment infrastructure that other online retailers may never even get a chance to break into some markets.

Devitt also said he expects global e-commerce sales to nearly double by 2016 to $1 trillion, of which almost almost one-quarter would belong to Amazon.

Much of that dominance in the future will depend, Devitt suggests, on Amazon’s vaunted logistical operations. This makes sense, since it’s also key to Amazon’s dominance today. Anyone can open an internet storefront these days. But few other companies can open 1-million-square-foot distribution centers or hire 50,000 seasonal employees to make sure orders get there by Christmas. No matter how good the website or the app, in shopping it’s the ability to deliver offline that counts the most.